SandboxAQ announced that it has entered into a definitive agreement with the U.S. Department of Commerce’s CHIPS Research and Development Office for a $500 million award.
The funding will support SandboxAQ’s work to develop, validate, and commercialize critical formulations for American semiconductor manufacturing using physics-based AI. The company said the award is intended to address foreign control of materials and chemistries that are essential to semiconductor manufacturing.
The award will fund development across four programmatic areas: PFAS-free process chemicals, catalysts, rare earth-free magnets, and battery systems. SandboxAQ plans to advance the strongest breakthrough results into scaled domestic manufacturing and commercialization through American manufacturing partners.
SandboxAQ said the funding supports R&D in categories where foreign supply has suppressed domestic production for decades. The company said the work is intended to strengthen national and economic security by improving access to critical materials used in semiconductor manufacturing.
The company will also invest in enhancements to its ReAQT software platform and Large Quantitative Models, known as LQMs. SandboxAQ said these models are trained on the laws of physics, chemistry, and biology rather than human language, enabling the company to virtually screen millions of candidate materials before selecting the most promising options for lab validation.
In connection with the award, the Department of Commerce will receive a minority, non-voting equity stake in SandboxAQ.
One area of focus is PFAS-free process chemicals. PFAS chemicals are used throughout chip manufacturing in heat-transfer fluids, lubricants, insulating coatings, and surface-treatment chemicals. SandboxAQ said compliant alternatives do not yet exist at scale, creating potential supply and regulatory risks for U.S. semiconductor factories.
The second programmatic area focuses on catalysts used in semiconductor fabrication, including the generation of ultra-pure gases and the mitigation of hazardous fluorinated exhaust. SandboxAQ said it will build on its AQCat workflows, developed in collaboration with NVIDIA using 13.5 million high-fidelity quantum chemistry calculations, to screen catalyst candidates with near-quantum-chemistry accuracy much faster than traditional methods.
Another area focuses on permanent magnets. SandboxAQ said U.S. semiconductor factories depend heavily on foreign-controlled supplies of neodymium-based permanent magnets, which are used in advanced chip manufacturing equipment, vacuum pumps, and precision actuators. The company plans to use ReAQT and its LQMs to screen magnet chemistries that reduce or eliminate reliance on neodymium and other heavy rare earth elements.
The fourth programmatic area focuses on battery systems. Semiconductor fabs require uninterrupted, precisely controlled power, and current backup systems often depend on battery materials such as lithium, cobalt, and key chemical precursors that are concentrated overseas. SandboxAQ said it will build on its AQVolt workflows to develop battery chemistries that do not depend on lithium and other materials with foreign supply chokepoints.
SandboxAQ said ReAQT will serve as the foundation for all four areas. The platform generates physics-grounded training data through high-fidelity simulations, including Density Functional Theory, Molecular Dynamics, and reaction modeling. It then trains SandboxAQ’s LQMs on that data and integrates the models into design-make-test workflows.
The company said the approach enables researchers to make more reliable predictions about materials that have not yet been synthesized, reducing the need for expensive and time-consuming trial-and-error lab work.
SandboxAQ has published technical work related to its frontier AI catalyst model in Nature NPJ Computational Materials and has also published research on PFAS breakdown in Chemical Science.
Support: Skadden, Arps, Slate, Meagher & Flom, Wilson Sonsini, Crowell & Moring, and PWC advised SandboxAQ on the transaction.
KEY QUOTES:
“President Trump is committed to strengthening America’s semiconductor supply chain and ensuring national security. This award will accelerate the discovery and innovation of critical materials and reduce our reliance on foreign-controlled materials.”
Howard Lutnick, Secretary of Commerce
“Securing America’s semiconductor future means controlling the materials that drive this vital sector. SandboxAQ’s large quantitative models are grounded in the engineering and physics needed to address the needs of our domestic semiconductor sector. This award from the U.S. Department of Commerce enables SandboxAQ to run advanced AI-driven programs across four critical material categories and then work with partners to scale the resulting formulations.”
Jack Hidary, CEO of SandboxAQ
“We built ReAQT around an insight that translates directly into competitive advantage. The most accurate simulation methods are too slow to search the range of materials that matter at scale. Models trained purely on existing data are fast but break down when applied to materials they have never seen. ReAQT solves both problems by generating its own high-quality training data grounded in physics, then training our Large Quantitative Models on it. The result is a platform that makes reliable predictions about materials, compressing development timelines in ways that shift what is commercially viable.”
Dr. Stefan Leichenauer, Vice President of Engineering at SandboxAQ
